1. Introduction

By letter dated 16.11.2012¹, CTT - Correios de Portugal, S.A. (CTT) submitted to ICP - Autoridade Nacional das Comunicações (ICP-ANACOM), a price proposal in the scope of the universal postal service, to apply with effect from 01.01.2013.

On 11.12.2012, ICP-ANACOM² addressed to CTT a request for clarifications and further information on revenue and cost estimates presented by this company, having this information been received on 19.12.2012³.

On 08.01.2013, ICP-ANACOM⁴ sent CTT a preliminary assessment on its proposal, in the light of applicable tariff principles (transparency, non-discrimination, cost orientation and affordability), having identified some doubts concerning the price proposal, for which this Authority sought the appropriate clarifications or revisions.

On 28.01.2013, CTT⁵ sent ICP-ANACOM a new price proposal for the universal postal service, on which ICP-ANACOM took a position, which in the meantime became out-of-date as CTT submitted, on 14.02.2013⁶, an amended version of the price proposal. CTT intends to implement the new tariff as from 01.04.2013, with an additional increase on 01.11.2013 of prices of 20g postal items of the national standard mail service, occasional segment, as well as of the Special Regime international economic mail service (with destination in Guinea-Bissau, São Tomé and Príncipe and East Timor).

The price proposal comes under the scope of application of the Universal Postal Service Price Convention, concluded on 10 July 2008 between ICP-ANACOM and CTT, taking into account that paragraph 7 of article 57 of Law No 17/2012, of 26 April (hereinafter the Postal Law) - which entered into force on 27.04.2012 - provides that such Convention will remain temporarily in force, until ICP-ANACOM establishes the criteria governing the setting of prices of the universal service (as provided for in paragraph 3 of article 14 of the Postal Law).

The price proposal (in appendix hereto) includes the following features:

a) It concerns parcels up to 10 kg and postal items up to 2 kg, including registered items and insured items, falling within the scope of the universal postal service, namely⁷:

i. Of a national scope: standard mail, priority mail, registered mail, easy mail, standard parcels and insured items;

ii. Of an international scope: standard mail, priority mail, registered mail, prime priority mail, easy mail, economic mail, business mail, standard parcels and insured items.

b) CTT proposes an average overall increase⁸ of prices by around 3.7%, on 01.04.2013 (see Table 1)⁹, and an additional increase by around 0.5% on 01.11.2013.

As regards the national postal item service, CTT's proposal corresponds, on 01.04.2013, to an average increase by 9% of prices of items delivered through the occasional segment¹⁰ and to an average increase by 2.7% of prices of items delivered through the contractual segment. The increase in the occasional segment is mainly due to the increase by 10.8% of prices of national standard mail, primarily explained by the increase by 12.5% of the price of national standard mail up to 20g, which on 01.04.2013 increases from 0.32€ to 0.36€.

As far as the international postal item service is concerned, CTT proposes an average price variation, on 01.04.2013, of 2.35%  for items delivered through the occasional segment and of -1% for items delivered through the contractual segment.

Relatively to postal parcels, CTT propose a variation on 01.04.2013 by 14.6% of prices of the national land service and by 8.2% of prices of the national air service, while maintaining prices of the international service.

c) CTT proposes a change in prices for items of correspondence up to 20g of the national standard mail service, in the occasional segment, as well as of the Special Regime international economic mail service (with destination in Guinea-Bissau, São Tomé and Príncipe and East Timor) to take place in two stages, the first on 01.04.2013, the price increasing from 0.32€ to 0.36€ (increase by 12.5%) and the second on 01.11.2013, when the price increases from 0.36€ to 0.40€ (increase by 11.1% on 01.11.2013, which corresponds to an overall cumulative increase by 25% relatively to the price currently in force).

d) Price differentiation between the occasional and contractual segments, covering the whole provision of mail services.

e) Introduction of a geographic tariff differentiation for the national standard bulk mail up to 50g, available only for the contractual segment, through the definition of two tariff areas according to the distribution destination (one area corresponding to Lisbon and Oporto and respective urban circles and the other corresponding to all other distribution destinations).

f) Elimination of the international economic mail delivery service, except for the Special Regime service (with destination in Guinea-Bissau, São Tomé and Príncipe and East Timor), given the general use of the air mail service, according to CTT.

By determination of 15.02.2013, ICP-ANACOM's Management Board approved a draft decision on the price proposal and submitted it to the prior hearing of CTT, under articles 100 and 101 of the Administrative Procedure Code, as well as to the public consultation procedure, as laid down in article 9 of Law No 17/2012 of 26 April, giving notice of this procedure to general interest consumer associations. The price proposal presented by CTT and the draft decision were also submitted to the opinion of ICP-ANACOM's Advisory Council, pursuant to point c) of article 37 of the Statutes of this Authority.

Contributions received and the opinion of ICP-ANACOM's Advisory Council were analysed in the scope of the "Report of the prior hearing and public consultation on the universal postal service tariff proposal, notified by CTT - Correios de Portugal S.A., on 14.02.2013".